The Telangana State Cyber Security Bureau (TSCSB) have warned stock market investors about a significant rise in scams targeting Initial Public Offerings (IPOs).
While 627 cases were reported in 2023 with a total loss of ₹3.9 crore, a loss of ₹27.4 crore has already been reported in 2024 so far with 213 cases.
These scams exploit the desire for quick profits and use messaging platforms like WhatsApp, Telegram, Instagram and Twitter to lure victims, said Director of TSCSB Shikha Goel.
“Fraudsters use these platforms to offer fake opportunities to invest in upcoming IPOs through institutional channels, promising high returns. They entice victims to download fraudulent trading applications that allow them to steal personal and financial information. Once the information is obtained, victims are presented with fake dashboards showcasing bogus investment portfolios, further convincing them to invest more money. However, when they attempt to withdraw their supposed profits, the requests are denied, resulting in significant financial losses,” she explained.
To safeguard from falling victim to these IPO scams, officials suggested that it is crucial to follow the guidelines and precautions provided by regulatory bodies like Securities and Exchange Board of India (SEBI), stock exchanges and licensed stockbrokers. “Always trade through reputable and regulated stock exchanges and utilise services only from SEBI-registered brokers with verifiable credentials. Remember, trading without a Demat account or through unauthorised apps is highly risky and should be avoided at all costs,” they explained.
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